Tuesday, March 31, 2009

Boston’s John Hancock Tower, New England’s tallest skyscraper, was sold at auction to Normandy Real Estate Partners and Five Mile Capital Partners LLC for $661 million, about half of what it traded for just three years ago.

The companies agreed to pay $20.1 million for the mezzanine debt on the 60-story building and assume the mortgage of $640.5 million, according to a statement issued at the auction in New York.

“We will look forward to serving their tenants in keeping with the high standards for which Normandy is known,” Normandy and Five Mile said in a statement. . . . more

Executives at Equity One, a North Miami Beach-based shopping center investor, announced late Monday several personnel moves aimed to cut costs and restructure management. The moves, which include the departure of two top officials, are expected to save Equity One $1.9 million annually, the company said.

Additionally, the company, which owns or has a stake in 160 properties, is in talks with Michigan real estate investment trust Ramco-Gershenson about merging the two businesses. . . . more

Confidence among U.S. consumers stayed near a record low in March, held back by job losses and fears of further hardship.

The Conference Board’s index increased to 26 this month from a revised 25.3 in February, the lowest reading since data began in 1967. A separate report showed home values plunged by a record in January.

Three straight months of 600,000 or more job losses and shrinking household wealth indicate that recent gains in consumer purchases may not be enough to keep the recession from lasting through much of the year. The lack of confidence could also limit the impact of tax cuts and incentives in President Barack Obama’s stimulus plan. . . . more

This is the most backwards thing you'll ever see. It also gives more confidence of the equity surviving even should they be forced to file.

From the WSJ:

But a bankruptcy filing isn't imminent for the mall giant, according to people familiar with the matter, and General Growth's (GGP) ability to remain out of bankruptcy shows the unusual dynamic between lenders and distressed companies in the recession-ravaged commercial-real-estate market.

Bondholders have refrained from forcing mall owner General Growth Properties into bankruptcy court, despite lack of a deal on a debt extension. Under normal circumstances a company with as much past-due debt as General Growth would have been forced into Chapter 11 bankruptcy protection by now. . . more

Here are two pieces dealing with store brands and how consumers are finally starting to check them out seriously due to the bad economy (after all, saving money appears to be "in" these days.)

The first is from Yahoo and has these interesting comments:

Some 64 percent of shoppers in 2008 said they often or always buy a store brand rather than a national one, according to the Food Marketing Institute, an industry trade group. That's up from 59 percent the prior year.

Kroger Co., owner of Ralphs, Fred Meyer, Food 4 Less and other chains in 31 states, saw sales of its in-house brands hit a record 27 percent of total sales in the most recent quarter. . . . more

“Lululemon is still exceeding the initial $750 sales per square foot target," Analyst Howard Tubin of RBC Capital Markets wrote in a note to clients, at a time when management is seeing more flexibility on rents.

Excess capacity in overseas markets has also helped the retailer secure more favourable pricing for fall and winter 2009 merchandise, he said. He maintained his outperform estimate and price target of $9 on the shares but cut his 2009 forecast to 52¢ from 57¢ and introduced a 2010 per share earnings estimate of 58¢. . . . more

It is a scenario that seemed unthinkable as little as a year ago: Today, the John Hancock Tower will be auctioned off, the fallout of high-flying borrowing practices that are expected to trigger a wave of defaults at trophy office properties across the country.

The Hancock, New England's tallest building, is being sold in New York City under a foreclosure process that began in January. Its owner, Broadway Partners, defaulted on some of the loans it had used to purchase the Back Bay skyscraper for $1.3 billion in late 2006.

In the past two years, the 60-story building's value has dropped by nearly 50 percent, to between $650 million and $750 million, according to analysis by the real estate firm Reis Inc., which used rents, occupancy rates, and other data to calculate the value. . . . more

Monday, March 30, 2009

Developers are putting the brakes on new centers this year as both consumer demand and financing dry up. Marcus & Millichap predicts that 90 million square feet of retail space will open this year, down from 131 million square feet last year. This is the lowest amount since 1995. New mall development is slowing, with only 6 million square feet slated nationwide this year. This slowdown will help stabilize the market in 2010 before a recovery starts in 2011, the firm says in a report. . . . more

The billboards are everywhere, the parties scrupulously planned and Kate Moss, the supermodel and designer, is poised to waft through New York's über-chic restaurants and clubs schmoozing a salivating fashion press.

"They're not draping the Empire State Building in the Topshop logo, but, yes, the customer is extremely excited," said Jim Fallon, editor of the fashion bible Women's Wear Daily.

After all the hype and all the setbacks, including flood, fire and a seven-month delay, the British clothing retailer will this week open its first US flagship store in midtown Manhattan. "It's just Topshop mania over here," said TeenVogue's fashion news director, Jane Keltner. . . . more

Its Sheer Size and 'Saves You Money' Mantra Positions Retailer to Dominate in Digital

BATAVIA, Ohio (AdAge.com) -- There aren't too many places where Walmart isn't dominant. The digital realm is one of the relative few, but not for long, as it ramps up a host of programs to vault the chain -- which has already distanced itself from value retailers in the offline world -- further ahead in the online one.

What makes Walmart's efforts so interesting is its ability to "own" the concept of value online. It launched free classifieds last year, and its site, thanks to its blogger outreach and online message boards, is already crammed with content about saving money that will only grow as it builds out Save Money Live Better, a portal for penny-pinching strategies. . . more

Fitch Ratings cut several ratings on Developers Diversified Realty Corp. to just-above junk status Friday morning, based on concerns about the shopping center company's debt load and its access to cash.

Ritz Camera Center Inc. has taken another step in its bankruptcy reorganization efforts.

The California-based privately held chain has won the approval of rules governing the sale of assets at 400 stores it plans to shutter. Ritz has 33 stores in New England, including 18 in Massachusetts. It has more 1,000 locations in 45 states.

U.S. Bankruptcy Judge Mary Walrath ruled in Wilmington, Del., that bidding procedures for the stores Ritz wants to close are fair. She also approved Ritz's request to borrow $85 million from to help fund operations as it shuts the stores.. . . more

The Finish Line is retooling its both its namesake and Man Alive stores, executives said at the company’s fourth quarter conference call.

This quarter will see the opening of two different Finish Line formats, one a 3,500-square-foot prototype (compared with a typical 5,400-square-foot store today), and one designed with Nike. One smaller format store (called Finish Line 4.0) has opened in Madison, WI, with another to open in Houston.

“We will be closely monitoring the results, and anticipate improved performance and productivity from this new store concept,” said Alan Cohen, chairman. . . . more

Stung from 2008, they must try to guess how economy will be in 9 months

NEW YORK (AP) -- Shoppers may be thinking about spring, but some retailers are reluctantly setting their sights on Christmas.

Still suffering whiplash from the worst holiday selling season in at least four decades, major toy sellers and upscale merchants -- who must order Christmas stock earlier than most retailers -- are exercising extreme caution as they plan for the rest of the year.. . . more

With loan defaults rising, analysts say the struggling commercial real estate industry is poised to fall into the worst crisis since the last great property bust of the early 1990s.

Delinquency rates on loans for hotels, offices, retail and industrial buildings have risen sharply in recent months and are likely to soar through the end of 2010 as companies lay off workers, downsize or shut their doors.

The commercial real estate market's fortunes are tied closely to those of the sinking economy, especially unemployment. . . . more

WASHINGTON (AP) — The government says consumers increased spending for a second straight month in February even though their incomes slipped due to continuing massive layoffs.

The Commerce Department reported Friday that consumer spending edged up 0.2 percent in February, in line with expectations. That follows a huge 1 percent jump in January that was even better than the 0.6 percent rise originally reported.. . . more

DSW is pleased to announce the opening of its 300th store in the United States. The 300th store opened in Folsom, California. DSW is currently one of the nation's fastest growing specialty retailers. Since opening the first DSW store in 1991 in Dublin, Ohio, DSW has experienced remarkable growth. Today, DSW operates stores in 37 states as well as an e-commerce channel, dsw.com. The 300th DSW store is the 100th opening in the past three years. . . . more

MINNEAPOLIS-Looking to maximize its existing store base and increase market share through its shuttered competitors, Best Buy Co. will slow store openings both domestically and internationally, executives said at the company’s fourth-quarter conference call.

The company is trimming capital expenditures by 50%, of approximately 65 net new stores, including about 45 new store openings domestically and approximately 20 net new stores internationally. The debut of large-format stores in the United Kingdom has been pushed to spring 2010. . . . more

JACKSONVILLE, Fla. – West Marine Inc. (NASDAQ: WMAR) has opened its largest store ever in Jacksonville, Fla., according to an article yesterday in the Jacksonville Business Journal.

The flagship store, which is 30,000 square feet and offers 16,000 products, is four times the size of an average West Marine location and offers about twice the number of products, the journal reported. Its unique features include a 300-square-foot model flybridge, a model fishing shack and skylights designed to reduce the need for electricity, according to the article. . . . more

Thursday, March 26, 2009

(March 26, 2009) Carl Verstandig, CEO of America's Realty, recently signed agreements to acquire five distressed shopping centers for $120 million. The largest, the 1.5-million-sq.-ft. Summit Place Mall in Pontiac, Mich., will absorb $58 million of the entire financial package. Verstandig says he plans to close the deals in April.

The Pikesville, Md.-based investor plans to revise the leasing strategy at each of the properties and pursue discount retailers in a bid to fill vacant spaces.

For five years, price-savvy fashionistas got chic style for less with the Isaac Mizrahi for Target line.

Then in 2008, he left the popular retailer to revitalize the Liz Claiborne brand as its creative director. Mizrahi revolutionized the idea of buying high fashions at a low cost with his successful Target collection, and in recent years, fellow big-name designers followed suit. Vera Wang created Simply Vera Wang for Kohl's. Red-carpet favorite Max Azria, of BCBGMAXAZRIA and BCBG Girls fame, has a brand called To the Max at Wal-Mart.

Now, more high-fashion designers are rolling out lower-priced lines to mass-market department stores and retailers, feeding the demand of consumers with trendy taste but small budgets.. . . more

In these tough economic times, what's a store to do to make sure it's still in business a year from now?"

Get a tarot card reader," said Emese Boone, owner of Box Turtle in Little Rock, Ark.And she's not kidding -- Boone hired a local tarot card reader to give free readings during a recent jewelry trunk show in her clothing, jewelry and housewares shop.

Retailers like Boone are hoping special events, classes, blood pressure screenings and even career counseling will inspire shoppers to keep on shopping during the worst economic downturn since the Great Depression.. . . more

The early predictions were gloomy: The recession gripping the U.S. would make for a dismal holiday shopping season for retailers. And while many retailers certainly felt the effects of the economic downturn, holiday dollar sales in 2008 actually increased 5.8 percent, or $99.5 billion, across grocery and drug stores, mass merchandisers and convenience stores, according to Nielsen.

Categories that drove the highest sales spikes were musical instruments and accessories, with more than half of the purchases for the year made in the last eight weeks of 2008. Women’s and children’s fragrances, baking supplies and computer electronics products were also favorites.. . . more

Solid Increases in Sales, Operating Margins, EPS, and Cash Generation Expected in 2009; Company Plans to Open More Than 400 New Stores Worldwide

GRAPEVINE, Texas--(BUSINESS WIRE)--GameStop Corp. (NYSE: GME - News), the world’s largest video game and entertainment software retailer, today reported audited sales and earnings for the fourth quarter and the fiscal year ended January 31, 2009.

Daniel DeMatteo, Chief Executive Officer, stated, “In spite of the current worldwide retail environment, GameStop’s financial performance is being driven by delivering to consumers what they want: stores in a wide range of locations, knowledgeable associates and most importantly, options that provide value. . . . more

NEW YORK CITY-As property values continue to sink and banks hold increasing numbers of nonperforming assets on their balance sheets, several funds have been formed to buy distressed loans and assets at bargain prices. But how many of these distress situations have actually translated into acquisitions? Thus far, relatively few.

"Buyers have no pressure to invest any time soon," said Robert White, founder and president of Real Capital Analytics. In Wednesday’s GlobeSt.com webinar "Opportunities in Distressed Assets", White and his fellow panelists explored the reasons that buyers are holding back even as the opportunities continue to proliferate. . . . more

ROMEOVILLE, Ill. (Mar. 25) Beauty retailer Ulta, which experienced a decline in both net income and same-store sales during the fourth quarter ended Jan. 31, is scaling back store expansion plans for fiscal 2009 to about 35 stores, an 11% increase in square footage.

“We reported solid fourth quarter results and adjusted full year earnings and comparable store sales equal to last year, despite the difficult economy,” stated Lyn Kirby, Ulta’s president and CEO. “We chose not to participate in the promotional frenzy that emerged across the retail industry in the key selling days leading up to Christmas. While this negatively affected our comp store sales during the gift-giving season, as we believe consumers favored the unprecedented discounts on apparel, we believe our balanced approach maintained the integrity of our brand and value proposition. While we had to reduce our guidance in response to the more difficult that expected holiday season, we delivered 21 cents per share for the quarter.” . . . more

Tuesday, March 24, 2009

Two venerable giants in the mattress industry announced today that they have entered into a transaction to combine their businesses in order to deliver greater quality, service and value to consumers.

Bethpage, NY-based Sleepy's, the largest mattress retailer in the country, will acquire certain assets of 1800mattress.com and invest in the growth of the brand as the nation's leading premiere telephone, internet and chat retailer of bedding and sleep products. The companies plan to complete the sale through Chapter 11 of the U.S. Bankruptcy Code that will include a bidding process and ultimately a court ordered sale. 1800mattress.com is first electing to convert a pending involuntary Chapter 7 bankruptcy petition. . . . more

The stock market’s dive and dried-up credit markets are battering the franchising business.

During previous recessions franchising had served as a bastion for laid-off workers seeking employment. But the lack of available credit today has made the franchise business — which requires a large outlay of cash to get started and maintain operations — a particularly tough prospect.

While the number of franchise starts in 2008 was unavailable, it’s clear that the franchising sector is taking its lumps. Last year, the number of bad loans tied to franchises spiked. And franchise failures for SBA 7(a) and 504 borrowers increased by 43 percent.. . . more

NEW YORK CITY-The biggest one-month drop in the eight-year history of the Moody’s/REAL National All Property Type Aggregate Index was recorded during January, Moody’s and Real Estate Analytics LLC reported on Monday. The monthly decrease of 5.5%, compared to a 2.2% drop registered for December 2008, puts the index back at levels last seen in spring 2005.

According to a release from New York City-based REAL, the index has now declined 19.1% year-over-year and is off 21% from its October 2007 peak of 191.87. The January index of 151.58 followed the December ’08 index of 160.46, and is roughly equal to the April ’05 level of 151.29. The index has not fallen below 160 since July of ’05. . . . more

Shopping mall owner pushes back deadline for its effort to win extension

Cash-strapped General Growth Properties Inc. said Monday that it has been unable to persuade holders of five series of bonds totaling $2.25 billion to agree to hold off demanding immediate repayment, but it pushed back the expiration of its effort to win approval of an extension.

"We continue to believe that giving the company time to work with its creditors to develop a comprehensive restructuring plan without the threat and distraction of ongoing defaults is in the best interests of the company and all its constituencies," said Chief Executive Adam Metz. . . . more

After a surge in home renovations during the housing boom, new studies show homeowners are significantly curbing spending on such projects — adding to the unemployment facing construction workers and hurting home improvement businesses.

Spring is typically the big season for home remodeling, but this year's falloff will be felt across many kinds of related businesses, including contractors and architects, home furnishings stores and home designers. . . . more

West Palm Beach, Fla. — Walmart is rolling out a new home branding effort that places the Better Homes & Gardens license at the core across both soft and hard home categories.

The latest iteration of the company’s merchandising intentions could be seen clearly in the grand opening of the newest Walmart Superstore here, on an outparcel adjacent to a Sam’s Club in a heavily traveled corridor just off Interstate 95. There were striking changes in the soft home department, as well as in the store overall – with Springmaid apparently relegated mostly to a niche in bedding, and little visibility in bath.. . . more

The Al Baskin Co., parent of Mark Shale stores, said it filed for Chapter 11 bankrupty protection after a "significant sales decline" that began in the fourth quarter.

The Chicago-based retailer plans to close its Chicago outlet store and seek a buyer for the remainder of its Chicago operations and Internet business. It will also close stores in Dallas; Kansas City, Mo.; St. Louis; and Atlanta.

The purveyor of high-end suits and sports clothing for men and women tried to cut expenses and negotiate with landlords to lower rents, but couldn't keep up with the "dramatic revenue decline," the company said in a statment. . . . more

Walgreens may have cut back on overall store growth, but it will be dramatically remaking its existing stores over the next 18 months, executives said at the company’s second quarter conference call.

In the first half of the fiscal year, Walgreens opened or acquired 269 stores, compared with 282 in the year-ago period, with a net gain of 235 stores after relocations and closings. It will introduce its customer-centric retailing project (CCR) format, which streamlines assortments and devotes more space to skincare and cosmetics, in 35 existing stores by summer, with an eye to rolling it out chainwide. . . . more

Monday, March 23, 2009

NEW YORK (Dow Jones)--Grocery store aisles are filling up with fresh bargains.

In an effort to draw cash-strapped consumers and boost sales, supermarkets are offering more coupons, promotions and other price reductions on staples from milk to frozen pizza.

For most of last year, grocers and manufacturers steadily hiked prices to combat rising commodity costs. Now, in a reversal, some of these companies are using promotions to boost sales without permanently cutting prices. . . . more

Pier 1 Imports said late Friday it lost $29.4 million in its fourth quarter and could close 80 stores this year. While better than expected, the company’s net income showed a dramatic reversal for the three months ending Feb. 28. During the same period last year, the company earned $14 million.. . . more

As the recession takes its toll and some retailers shutter stores and file for bankruptcy protection, others - clothing retailers such as Gap Inc. and Urban Outfitters Inc. - are finding they can reduce their rent, an analyst said Friday.

Many retailers are getting tough in negotiations with landlords on new store openings, they're renegotiating leases up for renewal and they're closing underperforming stores with high rents, Citi (nyse: C - news - people ) Investment Research analyst Kimberly Greenberger said in a note to investors.. . . more

The company, which has been working with its lenders to avoid bankruptcy, missed a March 16 payment deadline, which had been extended from Feb. 9, on a $95 million loan payable to Citicorp North America Inc., Sandelman Partners CRE CDO I Ltd. and Pembrook Community Investors LLC, the news service reported, citing a Citi statement. . . . more

Reading, PA retailer may revive some signature items, mixed in with new ideas

Albert Boscov walked around some of his department stores soon after regaining control of the eponymous chain last December and didn't like what he saw.

''What we had in there was an embarrassment,'' he said at a business conference Friday, describing what he felt was a lack of variety and new merchandise on the sales floors. ''I used to walk in there with pride.

''Boscov, who retired as chairman in 2006 and handed over the company to his nephew Ken Lakin, has been trying to restore that pride since returning as chairman and CEO.. . . more

NEWARK, N.J. - The opening of the long-delayed Xanadu retail and entertainment complex in New Jersey's Meadowlands has been pushed back again due to a default on a construction loan, a project spokesman said Friday.

"We are contemplating a new opening date beyond August 2009 and we have asked our contractors to refocus their work in line with that goal," Meadowlands Xanadu Development spokesman Tim White said in a statement. White said there is no work stoppage at the site.

White said the delay is due to a default by lender Xanadu Mezz Holdings LLC, a company described as a non-bankrupt affiliate of Lehman Brothers. Xanadu Mezz "has refused to fund its share of our construction loans," according to the statement. . . . more

Sunday, March 22, 2009

KINGSTON - Independence Mall should be celebrating its 20th birthday this year with fanfare. Instead, the shopping center here, pocked with empty storefronts like missing teeth and rattled by rumors of its demise, has postponed the festivities and is simply trying to survive.

In the past year, the mall has lost two major stores to bankruptcies - Steve & Barry's and Linens 'N Things - and other closings have sent its vacancy rate soaring. Traffic is down and Independence is struggling to attract tenants with the recession and the recent opening of nearby Colony Place, a vast new shopping plaza with more restaurants, convenient parking, and specialized shops.. . . more

Consumer cutbacks could be a sign of profound shift in how economy operates

The era of the consumer-driven economy may be over.After powering US and global growth for more than a generation, the American consumer has run out of gas. Burdened by debt and no longer able to borrow against rising home and stock values, US households have begun a long-term retreat in spending that will require the nation and the world to find different economic drivers, economists said.. . . more

Friday, March 20, 2009

Churro Station, the fresh authentic churro maker and franchisor, is pleased to announce new restaurant locations have opened in Phoenix and Peoria, Arizona, South Beach in Miami, Florida and Fort Mill, South Carolina with several California locations and a Las Vegas Nevada location opening soon. . . . more

At a time when other retailers are cutting back and the recession continues to deepen, select assortment discount grocer ALDI is celebrating its 1,000th U.S. store in West Haven, Conn. The new ALDI store opens Monday, March 23, at 535 Sawmill Road in West Haven, the grocer's first location in the city. The expansion comes on the heels of continued, steady growth for ALDI who is now serving more than 18 million customers per month in 29 states. . . . more

PORTLAND, Oregon, March 19 (Reuters) - Costco Wholesale Corp (COST.O), the No. 1 U.S. warehouse club, plans to take advantage of the distressed real estate market to open stores this year, even as sales decline because of the recession, its chief executive said on Thursday.

"We're getting better deals on real estate," said Costco's CEO Jim Sinegal at a media event in Portland, Oregon. "People who didn't want to talk with us about shopping center sites now want to talk with us.". . . more

In May, Gap Inc. will open Edition by Banana Republic, a 1,500-square-foot accessories store, in Westfield San Francisco Centre.

The store is a test of a new boutique concept that will feature limited edition handbag and jewelry collections that are unique to Edition, as well as an assortment of regular Banana Republic shoes, sunglasses, personal care items and seasonal accessories.. . . more

WASHINGTON — Consumers will cut back on their Easter holiday spending this year, according to the National Retail Federation’s 2009 Easter Consumer Intentions and Actions Survey, conducted by BIGresearch.

The average American will spend $116.59 on Easter candy, gifts, food and decorations, down from $135.03 last year. Meal preparation will account for the biggest expense, with consumers spending $37.67 on average, down from $41.09 last year. . . . more

ISSAQUAH, WA, Mar 19, 2009 (MARKET WIRE via COMTEX) -- Costco Wholesale Corporation, the leading warehouse club operator, is opening a new Costco Business Center in Hawthorne, CA, at 8 a.m. on Friday, March 20, 2009, to better serve Los Angeles-area businesses. The new Costco Business Center stocks more business-oriented products than standard Costco Wholesale warehouses. Businesses have two ways to purchase from the Costco Business Center -- either shop the warehouse in Hawthorne or receive delivery from the Costco fleet. Delivery orders can be placed online at Costco.com or by phone or fax.

"Our Business Centers cater to businesses by offering products for their specific needs. We carry more than 7,000 diverse items, including vending products, convenience store items, restaurant/institutional foods, hospitality products and office necessities such as office supplies, office furniture, office equipment, janitorial and break-room supplies," states Phil Lind, Vice President of Business Centers for Costco Wholesale. . . . more

Shares of OfficeMax Inc. climbed in Thursday trading, after an analyst said the struggling office supply chain has a chance to increase its market share as a competitor shuts more than 100 stores.

Citi analyst Kate McShane told investors in a research note published late Wednesday night that she was maintaining her hold rating on the Naperville-based retailer's stock after spending a day meeting with executives.

PLEASANTON, CA-Having just reported record earnings for the year and quarter, Ross Stores, Inc. still has the potential to be at least a 1,200-store chain, executives said at the company’s fourth-quarter conference call.

Plans call for a 5% increase in square footage this year, and the company is still formulating its 2010 forecast, said Michael O’Sullivan, executive vice president and chief administrative officer.

“We expect to continue to grow, though plans to enter new markets are probably a couple of years away,” O’Sullivan said. . . . more

Thursday, March 19, 2009

COLUMBUS, March 19, 2009—In the wake of the worst holiday in at least 40 years, Retail Forward forecasts a grim outlook with continued flat-to-negative growth across most retail channels through most of 2009. Retail Forward forecasts retail sales outside of the channels where food and other household consumables are sold will continue to decline through the first three quarters of the year.

On an annualized basis, this forecast translates into core retail sales less autos and gasoline that are expected to end up flat in 2009 compared with 1.8% growth in 2008. The only growth will be in the food, drug and mass channels, which are expected to grow at about half their rate of 2008. Assuming the right conditions emerge, the fourth quarter of 2009 should begin to show signs of improvement, helped by weak prior-year comparisons. . . . more

CHICAGO (AdAge.com) -- Distressed that Starbucks has become the "poster child for excess," CEO Howard Schultz said the coffee company plans to run an ad campaign proving its coffee isn't expensive.

"There's a myth out there that there's this $4 cup of coffee at Starbucks," Mr. Schultz told shareholders at the company's annual investor meeting earlier today. "For whatever reason, Starbucks Coffee Co. has become the poster child for excess, and if you want to be really smart, you should cut out that $4 cup of coffee." . . . more

Shopping malls are here to stay, at least according to David Simon, chairman and CEO of Simon Property Group, owner of more than 350 malls, outlet centers and other retail-oriented properties in the U.S., Europe and Asia.

Indeed, Simon said during a recent Wharton Leadership Lecture, his firm, the nation's largest public real estate company, might consider making acquisitions again given that prices have recently fallen to levels last seen in 2002. The company, he added, is well positioned to weather a consumer downturn that has eliminated such familiar mall tenants as Wilson's Leather, the Sharper Image and Steve & Barry's. . . . more

For budget-conscious teens, retailer Five Below couldn’t be more apropos — a dollar store aimed at them, just as after-school jobs dry up and mom puts her credit cards on lockdown.

Unlike many traditional dollar stores, which are deliberately drab, Five Below (all items $5 or less) celebrates whimsy. Music pumps from speakers and painted wheelbarrows playfully “tip” out novelty merchandise. Most of the left side of the store is devoted to style: earrings, sunglasses, beauty supplies, a T-shirt wall and peg racks featuring handbags, scarves, flip-flops, tights and other accessories. There are Guitar Hero posters and pink travel coffee mugs with a makeup mirror built in and not a can of Comet bathroom scrub in sight.. . . more

PORT WASHINGTON, N.Y. — While consumers' are expressing general concern about the economy and their purchase intentions are down, concerns about job security and income have leveled off, signaling stabilization, according to a survey this week by The NPD Group here.

The tracking survey that reflects consumers' shopping intentions dropped five points between October 2008 and February 2009, but the percentage of consumers "very concerned" about job security and income fell four points from a high of 38% in December to 34% in February. Those "not concerned" rose one point from 25% to 26% in the same time period. . . . more

Wednesday, March 18, 2009

Shares of Darden Restaurants shot up Wednesday after the company increased its guidance, thanks to falling commodity prices, savings from an acquisition and increasedmarketing.

"This is an environment where value is increasingly important to consumers and as a result we've really elevated our efforts to find lasting structural cost improvement opportunities that can reduce the need for us to take pricing," Chief Financial Officer Brad Richmond said during a conference call.. . . more

American Apparel Inc. said Tuesday that it expects full-year sales to come in above its prior-year results amid new store openings.

The teen retailer, which received an $80 million investment last week, anticipates 2009 revenue in a range of $575 million to $600 million. It reported 2008 sales of $545.1 million.

American Apparel said it had 260 stores as of Dec. 31 as compared with 182 stores a year ago. The retailer has opened five new stores for the year to date and expects to open nine more that are currently under development. American Apparel projects that it will open 25 to 30 new stores in 2009.. . . more

NEW YORK CITY-Commercial property owners surveyed by PricewaterhouseCoopers are not waxing enthusiastic about the hand the downturn has dealt them. "As frightening as it seems, the worst is not behind us," the quarterly Korpacz Real Estate Investor Survey quotes one participant. "We will feel more pain before we hit bottom and start to recover," says another. With that zeitgeist as the backdrop, the response of a third participant sums up the report’s basic finding: "We are more in survival mode than in acquisition mode."

Increasingly, investors are looking to protect the value of their existing properties "in order to compete and survive in an increasingly challenging environment," according to PWC, which issued the survey on Tuesday. Real estate investors don’t anticipate a rebound in any sector until well into 2010, the survey states. Meanwhile, "property owners are faced with limited financing options, declining tenant demand, rising overall capitalization rates and deflated confidence," according to the survey. . . . more

March 18 (Bloomberg) -- The cost of living in the U.S. rose more than forecast in February, easing concern that the inflation rate will fall below the Federal Reserve’s preferred level.

The consumer price index rose 0.4 percent after a 0.3 percent increase in January, the Labor Department said today in Washington. Excluding food and fuel, the so-called core rate climbed 0.2 percent for a second month. Fuel, clothing and automobile costs led the advance last month. . . . more

Walgreen Co. plans to acquire the Somerset-based Drug Fair company, closing at least 11 of the stores and putting the Walgreen's name on others, according to a memo distributed to Drug Fair employees this morning.

Speculation about a possible acquisition had intensified during the past two days after two Drug Fair stores were closed abruptly last weekend.. . . more

For retailers, 2009 is a game of survival, and already more than a few haven't made it. American retailers could shutter 73,000 stores in the first half of 2009, according to the New York-based trade group International Council of Shopping Centers.. . . more

Tuesday, March 17, 2009

WASHINGTON—The number of new housing projects that builders broke ground on in February rose sharply, defying economists' forecasts for yet another drop in activity.

The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.. . . more

MINNEAPOLIS — Target Corp. said yesterday the proxy fight it hoped to avoid at its annual meeting May 28 may be unavoidable, following an announcement by William Ackman that he intends to nominate his own slate of directors to stand against management’s slate.

Ackman, founder and chief executive officer of Pershing Square Capital Management, which owns a 10% stake in Target, has been pressuring the retailer to sell its credit card portfolio — a move that could boost the retailer’s stock price and enable some investors to sell their holdings at a quick profit, industry observers pointed out. . . . more

March 16 (Bloomberg) -- Hedge-fund manager William Ackman said he may join the board of General Growth Properties Inc. and that he expects the shopping-mall owner to file for bankruptcy “imminently.”

Ackman, who heads Pershing Square Capital Management LP, said in a Bloomberg Television interview today his company has taken stakes that could give it 25 percent of Chicago-based General Growth. He said he advocates a bankruptcy plan in which “the equity survives intact.” . . . more

According to Crain's Cleveland Business (via NLG), Forest City Enterprises (FCE) is so desperate for cash that, rather than sell only poor-performing properties, it is now marketing a very different portfolio, "gem office and retail buildings in superior markets and apartments in hot rental markets.

"On the block are 10 apartment buildings around the country, office space in Boston, and, via brokers CB Richard Ellis and the Holliday Fenoglio Fowler, four retail properties in New York City.

LOS ANGELES - Troubled shopping mall owner General Growth Properties Inc. said lenders have waived default on a $2.58 billion credit agreement until the end of the year, allowing the company some time to regain its financial footing.

But its Rouse Company unit extended the expiration date on a request for forbearance on another more than $2 billion worth of debt, after it failed to convince enough of its bondholders to give it more breathing room.

General Growth said it has received enough consents from lenders under its 2006 corporate credit agreement, which includes a $1.99 billion term loan and $590 million revolving credit facility, to extend a forbearance agreement currently in place through the end of 2009. . . . more

Best Buy knocked Circuit City out of the game, but it now faces a bigger challenge.

Wal-Mart says consumer electronics drove much of February’s 5.1% increase in same-store sales, or sales at stores open at least a year, as the retailing giant increased its selection of cell phones, video games and major brand TV sets.

Few can compete head-on with Wal-Mart on price, and Best Buy plans to stress service as it slugs it out in the aisles with the retailing giant, the Wall Street Journal reports.

Best Buy hopes to counter Wal-Mart’s ruthless price-cutting by stressing customer service. Best Buy will allow customers to see their image captured by a high-definition video camera, or get hands-on experience with a new video game. The bet: Allowing customers to interact with the merchandise before making a purchase at Best Buy beats strolling down aisles stacked high with merchandise -- but devoid of staff -- at Wal-Mart. . . . more

BROOKLYN, NY-BJ’s Wholesale Club has signed a lease to anchor Canarsie Plaza, a mixed-use redevelopment planned by a joint venture of Acadia Realty Trust and PA Associates at 8925 Ave. D in Brooklyn. The wholesale club will take the 170,000-square-foot space formerly taken by Home Depot, which last year canceled its pre-leases there and at Pelham Manor--another upcoming Acadia/PA mixed-use in Westchester County. Terms of the BJ’s lease were not disclosed, and Acadia SVP Jon Grisham did not return GlobeSt.com’s calls by deadline.

"While many retailers may be struggling at this time, BJ’s is well-positioned to outperform its peers during this difficult phase of the economic cycle," says PA principal Paul Slayton in a release. "Along with our site in Pelham Manor, we are pleased to add them to another of our urban/infill redevelopment projects. The addition of BJ’s to Canarsie Plaza will add significant value to the center. We anticipate construction of the project to commence shortly." Published reports say the 250,000-square-foot Canarsie Plaza will cost about $65 million to build. . . . more

Monday, March 16, 2009

March 16 (Bloomberg) -- There’s little relief in store for investors in U.S. shopping center and mall landlords even after the shares plummeted 78 percent from their February 2007 highs.

“REITs are cheap but they’re going to continue to be cheap,” said Marc Halle, managing director of Prudential Real Estate Investors in Parsippany, New Jersey, whose firm manages about $32.5 billion in real estate assets. “We’re going to see increased corporate bankruptcies and continued unemployment for the next few months.” . . . more

Landlords for the nation's 100,000 shopping centers, including those whose shares are already under pressure because of store closings in the wake of a consumer-spending pullback, are facing a second, silent financial time bomb that could further cut revenues, retail insiders tell The Post.

The problem stems from co-tenancy clauses in the leases of many stores that allow them to pay lower rents - and sometimes vastly lower rents - should large anchor stores in their mall close. . . . more

After more than a decade, discounter A.J. Wright is finally getting it right.The chain, run by TJX Cos. in Framingham., recently reported turning an annual profit for 2008, the first time the merchant has done so since launching in 1998.

Now, as consumers scale back their budgets and look for ways to save money, A.J. Wright seems poised to continue its growth: Company executives are looking to capitalize on the current economic downturn to expand A.J. Wright and open 13 new shops this year for the 135-store chain. With more cost-conscious customers and an abundance of real estate as other chains languish, retail analysts see the potential for A.J. Wright to quadruple in size in the coming years.. . . more

Levittown - The recession isn't slowing the expansion of the Cherry Hill Mall, which is slowly unveiling its new features and additions.

While some investors and shoppers are shying away from spending these days, mall executives at the regional shopping center have proceeded with their plans to add more to the mix of retail and dining establishments, including a "restaurant row" and a renovated wing anchored by the newly constructed Nordstrom.

"There's a lot of positive energy with this project," said Judy Trias, vice president of marketing for Pennsylvania Real Estate Investment Trust, the Philadelphia real-estate company that owns the facility as well as nearby Moorestown Mall and other area retail centers.. . . more

Target Corp. expects the sagging economy will continue to weigh down its sales this year and plans to conserve cash by slowing down new store openings, the company said Friday in a securities filing.

The Minneapolis discount retailer expects to open roughly 75 stores this year, down from 114 new locations in 2008. Target (NYSE: TGT) also estimated it will spend between $2 billion and $2.5 billion on capital investments this year. . . . more

WASHINGTON (Mar. 13) While the tough economy is hurting most retailers, retail pharmacies might escape the worst of the downturn, according to a report released March 12 by the U.S. Census Bureau.

Though unadjusted sales at furniture and home furnishing stores were down in January and February by nearly 14%, compared to the same period last year, and sales at car and car part dealers dropped by 24.1%, sales at retail pharmacies increased by 1.5%.. . . more

Friday, March 13, 2009

The Buckle is still shining. The Kearney, Neb.-based retail clothing chain announced that net income for the fourth quarter ending Jan. 31, 2009, increased 18 percent. Income for all of 2008 increased 39 percent.

"We are pleased with our results for both the quarter and for the fiscal year, and feel that both our people and our product have us well positioned for continued success in 2009," Dennis Nelson, president and chief executive, said during a conference call Wednesday. The higher quarterly earnings came on a 22 percent increase in sales. For the year, sales were up 28 percent, to a record $792 million. . . . more

A refugee of Hurricane Katrina, Ruth's Chris Steak House decided to start over again in Central Florida a few years back rather than rebuilding its corporate headquarters near New Orleans.These days, however, the Lake Mary-based company is weathering perhaps an even tougher storm -- this time an economic one.

High-end restaurants such as Ruth's have been hit especially hard in the recession as consumers have shut their wallets, and corporations have cut back on travel and entertainment.

But Ruth's has additional problems, including a large amount of debt, much of it incurred after last year's $92million purchase of Mitchell's Fish Market and several other brands. . . . more

Beating analysts’ expectations for a second straight month, February retail sales showed surprising growth. According to the National Retail Federation, retail industry sales for February (which exclude automobiles, gas stations and restaurants) rose 0.6% seasonally adjusted from January, and decreased 5.0% unadjusted over last year.. . . more

NEW YORK — Giorgio Armani is an icon in the fashion industry largely because he can roll with the times. Right now - a dismal period for fashion and the luxury market - that means offering a range of styles and prices under one roof.

"Luxury before was just an elite thing. Now the sense of luxury is more democratic," Armani said from a booth at the restaurant that is part of his new Manhattan store on Fifth Avenue.

Casting a wide net while still making the shopping experience special is what Armani is aiming for with the new store. He recently visited here to christen the 43,000-square-foot space, complete with a party attended by Victoria Beckham, Leonardo DiCaprio and Mayor Michael Bloomberg.. . . more